ANALYSIS: What future for the A340-300?

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Máximo Gainza, an aviation analyst with Flightglobal advisory service Ascend, considers the outlook for Airbus's first four-engined airliner versus its 777-200ER rival

Since 2008, there has been a growing consensus in the industry that the Airbus A340-300 - much like its larger -500 and -600 siblings - has entered the autumn of its life, a few years ahead of schedule. The obvious explanation is that it has four engines and fuel prices have for the most part gone in one direction since 2008 - up. However, has there been perhaps too much focus on the quantity of the A340-300's engines, and not what they burn, deliver and cost to maintain?

The A340-300 entered service in 1993, two years ahead of Boeing's 777-200. In the early years, the A340-300 was not known for its performance, but Airbus and CFM International worked to upgrade the aircraft's maximum take-off weight (MTOW) and engines to deliver an aircraft truly comparable in range and payload to Boeing's long-range rival, the 777-200ER. Marketed as the "A340-300X" and "A340-300E" versions, these higher-gross-weight variants of the A340-300 boasted better take-off performance, lower fuel burn, higher payload and longer range. They could also venture into territory where extended twin-engine operations (ETOPS)-limited 777s could not operate until recently: more than 180min from the nearest airfield.

This allowed the aircraft to gain popularity with airlines such as Air Mauritius, South African Airways, Air Tahiti Nui, Aerolineas Argentinas and LAN, all of which needed the aircraft to cross the most desolate swathes of the world's major oceans. Others chose the type for its better engine-out performance than twin-engined aircraft at hot-and-high airports.

However, demand for the A340-300 never ran to high levels despite the presence of these factors. In 1997, production of the type peaked at just 30 annual deliveries, whereas Boeing delivered more than double the number of 777-200ERs - 63 to be exact - when its production peaked in 1999.

By the time Airbus closed the A340-300 line in 2008, only 218 had been delivered. Boeing, meanwhile, has delivered 419 777-200ERs in a 18-year production run that currently matches that of its rival, with at least three more aircraft yet to be delivered. As far as orders and deliveries go, the Boeing aircraft emerged as the clear winner; albeit Airbus has increasingly been competing with the A340's twin-engined sister, the A330-300 (as it offered higher weight versions with longer range), and the two types' combined sales have now outsold the -200ER.

As far as operator base goes, however, the types are much closer together - approximately 30 each, indicating a higher concentration of 777-200ERs among fewer operators.

So why then has the 777-200ER fleet been relatively static since 2008, while the A340-300s have been traded more actively in the market? Both ownership and operating costs may provide some answers. The A340-300's market values and lease rates have certainly fallen to much lower levels. While airframe and landing gear overhaul costs are fairly similar between the two aircraft, the cost of overhauling a 777-200ER engine - be it a General Electric GE90, Pratt & Whitney PW4000 or Rolls-Royce Trent 800 - and replacing its life-limited parts can be more than double an equivalent pair of CFM International CFM56-5C engines on the A340-300.

The CFM engines may be smaller and less powerful than the fuselage-sized engines that hang from a 777 wing, but the A340-300 is still able to accomplish a very similar mission both in the carrying and consumption of less fuel. On the latter point, despite the A340-300 burning more fuel in climb mode than the 777-200ER, it burns less fuel in cruise mode. In terms of block time, the Airbus burns approximately 5% less fuel per hour. The A340-300s are averaging some 3,000nm (5,560km) per scheduled sector, while the -200ER is averaging at around 10% more.

As aircraft types reach maturity and begin to be parted out, the availability of spare engines and other major components on the used market begins to increase. In cases where an operator does not plan to operate the aircraft for much longer, such circumstances provide a cheaper alternative to acquiring spares directly from the original equipment manufacturer. In this aspect, the A340-300 again holds the advantage as more than a dozen of the type have been parted out to date compared with only one 777-200ER. In addition, the CFM56-5C engine shares a number of common components with the CFM56-5B and -7B variants that power the Airbus A320 and Boeing 737NG families respectively, further boosting spare-part availability.

So where then does the 777-200ER hold the upper hand? Its high level of commonality with the larger and more successful 777-300ER - for which Airbus does not currently boast an in-production competitor - would be a good starting point. The A340 family has become something of an orphan product despite its commonality with the A330. The 777-200ER's higher cruise speed can also reduce journey time by almost an hour compared with the A340-300 on particularly long sectors.

Another consideration is that a static population is not necessarily an unhappy one. There are so few 777-200ERs publicly available for sale or lease, which probably reflects a very satisfied customer base that is happy to hold on to the aircraft for a few more years. With an average age of 11.7 years compared with 14.4 years for the A340-300 fleet, most operators do not see the need to replace their 777-200ERs just yet. This contrasts sharply with A340-300 operators, most of whom plan to either reduce or fully withdraw their fleet within the coming months and years. However, 777-200ER values are starting to soften and this process will accelerate as newer technology becomes more readily available (the Boeing 787-10X is one likely successor of the type).

There is also the uphill, often futile challenge of changing industry perception. The more the market becomes convinced of the A340-300's obsolescence and the more a four-engined aircraft becomes ingrained as an "outdated, inefficient" design, the more it will become so. The A340-300 may boast wider seats and fewer middle seats than the 777-200ER, but so does the A330, which will continue to replace the A340-300 in a growing number of routes as its range and payload increase and ETOPS restrictions decrease over time.

With all the A340 variants out of production, Airbus is keen to prevent them from becoming obstacles to further A330 and A350 sales. Unsurprisingly, the most recent A340-300 trading activity involves lease extensions, short-term leases (six years or less) and sales for parts.

It is not uncommon for an out-of-production aircraft type to gain popularity or even a new niche before its final slide towards extinction. For the right price, the A340-300 is still a versatile and capable widebody available on the used market today, which may explain the type's recent surge in leasing activity. If not for ETOPS restrictions and hot-and-high performance, however, it is likely that the award would go to Boeing's 767-300ER, whose resilience defies gravity in a similar manner to an A340-300 at take-off.